Yahoo! and Microsoft’s search deal has been delayed and will not be completed
until “early 2010”.

The two companies signed a 10-year deal in July 2009, which will see Microsoft’s Bing technology power Yahoo! search. Both companies have been waiting on US regulatory approval and at the time of the signing of the deal said they expected it to be closed by October 27.

However, Yahoo!, which will be responsible for selling advertising around the combined search efforts, has filed a statement with the US Securities and Exchange Commission, which gives the first indication that the deal is taking longer than both parties had predicted.

“Given the complex nature of the transaction, there remain some details to be finalised," Yahoo said. "The parties are working diligently on finalising the agreements, have made good progress to date, and have agreed to execute the agreements as expeditiously as possible."

A Yahoo! spokesman then released the following statement: "Both companies are optimistic that we will be able to close this deal by early 2010.”

Microsoft declined to comment.

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After the deal is cleared by the US regulator, it will then have to face European regulators, which will add time to the process.

Ian Maude, head of Internet at Enders Analysis, said: “I am not surprised it is taking a longer time than first anticipated. It is a challenge to get two former rivals to work together – both culturally and technologically. And the intense regulatory oversight of a deal, which has a lot of moving parts, is gruelling to prepare for.”

Microsoft’s Bing and Yahoo! search are pooling their efforts in order to try and take on the dominance of Google in the search market. According to Net Applications’ most recent global figures for October 2009, Google accounted for 84.5 per cent of all searches, while Bing took 3.5 per cent share and Yahoo! search accounted for 6.68 per cent of the total market.

Last month, at the Web 2.0 conference in San Francisco, Google’s co-founder, Sergey Brin, voiced his disappointment about Yahoo! effectively exiting the search market, as he felt the company had been recently innovating in the space.